Good morning. Whether they’re looking at their business processes or simply the quality of the applications they’re providing end users, CIOs have opportunities to step up their game.

Yale University CIO Leonard Peters, who in May 2011 began a year-long transition from an on-premise application suite used to manage IT functions to a cloud-based suite, says the migration is now complete — sort of. Peters says it will be another six months to a year before the application is running the way he wants. “This isn’t the kind of thing where you stand up and declare victory,” Peters told CIO Journal. “You need to move into a continuous improvement phase.”

By now, with all the customizations he’s made to the application, it’s too late to switch if he wanted to. According to new research from Nucleus Research, most customers of new cloud services are pretty much locked into their new acquisitions after the six month mark, and aren’t ready to switch for another year — or 18 months from the date of the original contract. But those six months are fairly volatile for the vendors — 52% of customers consider switching vendors in that window — and a good time for CIOs to make demands. “If you’re a CIO and you’re not happy, you have options,” Rebecca Wettemann, vice president of research for Nucleus Research, tells CIO Journal.

TECHNOLOGY NEWS

Business technology now the toast of Silicon Valley. The CEOs behind stodgy business technology start-ups have suddenly become Silicon Valley royalty, invited to speak at all-star confabs, scoring luxury box tickets to San Francisco Giants’ games and dining with VCs. “I’ve gained 20 pounds this year,” Phil Fernandez, CEO of marketing software firm Marketo, tells the WSJ’s Pui-Wing Tam and Ben Worthen. “It’s the side effect of being cool in Silicon Valley.” The attention comes as a realm of technology once branded “unsexy” is finding success on Wall Street, largely thanks to the solid growth shown by the likes of Splunk and ServiceNow.

Dumping the 80/20 rule. CIOs should be disrupters and business-driven, rather than IT-driven executives, writes former InformationWeek editor and current Oracle SVP Bob Evans in Forbes. We don’t usually give vendors a voice in the Download, but we’re making an exception here because Evans has some interesting points to make, notably that CIOs should start shifting some of the 80% of their budgets dedicated to maintenance to more innovation-focused efforts. It’s easier said than done (although easier if Oracle and its ilk ratcheted down their maintenance fees), but Evans suggests shifting the ratio incrementally, by five percentage points per year. It’s important, he says, because IT policies of the past are sucking up “vast percentages of the IT budget and make it almost impossible for CIOs to fund essential new efforts in analytics or cloud or mobile or social.” And speaking of social, Evans argues that CIOs should drive social adoption within their organizations — or run the risk of being pushed aside by marketing and line-of-business heads who get it.

We could not agree more. CIOs such as Shell‘s Alan Matula and TDBank’s Glenda Crisp are among those who have made social strategy a prerequisite for success. Stephen Lamb, CIO of the British Columbia Institute of Technology, tells guest columnist Michael Krigsman, “CIOs have unique insight into their organization because we touch aspects of life in every department. The CIO must shift away from just being a gatekeeper and help the organization to thrive.”

New Facebook research draws criticism. Facebookhas tapped a service called Datalogix that can tell if users buy products advertised on the social network. Datalogix uses a database of 70 million households to match identifying information such as loyalty cards against information submitted by users to establish Facebook accounts. The two companies have measured 45 campaigns so far, write the FT’s Emily Steel and April Dembosky [registration req'd], and the practice is raising complaints from privacy advocates who say such usage, which automatically opts users into the studies, violates a $9.5 million settlement with the FTC.

Thin display drives iPhone 5 shortfall. Apple’s decision to create a smartphone that boasts a thinner, lighter touch screen contributed to the component shortfall that caused demand to outstrip supply of the iPhone 5 on its debut weekend, Bloomberg’s Adam Satariano and Jun Yang write. Apple had enlisted Sharp, Japan’s largest maker of liquid-crystal displays, to round out its stable of suppliers and lessen its reliance on longer-term partner LG Display. But Sharp is struggling to reduce defects in the new screens, which combine the display and the touch sensor into a single part, and was unable to start shipments until after the iPhone debut.

Mirrors that double as computers. A wave of new mirrors use sensors, cameras, and flat-panel displays to transform the time-tested looking glass into health-monitoring devices, writes the WSJ’s Daisuke Wakabayashi. Designed to measure vital signs, the “smart” mirrors can also be used by consumers to try on clothes virtually, or to keep track of news and information. Japanese electronics conglomerate Panasonic initially considered targeting household consumers with its digital mirror—a flat-screen display powered by a computer behind a two-way mirror—but decided to target business customers instead because of the price. In July, Panasonic started accepting orders for its mirror—priced at nearly Y3 million ($38,000)—targeting physical rehabilitation centers.

Tivo does the time warp again (with Verizon this time). Digital video recorder maker Tivo said Verizon will pay it at least $250.4 million to settle a patent dispute, reports the WSJ’s Melodie Warner. Tivo filed a lawsuit in 2010 alleging Verizon used its TV “time-warping” technology in its video recorders. Tivo reached a similar agreement with AT&T in January.

Apple sells five million iPhones, Wall Street rolls eyes.Apple said it sold five million units of the iPhone 5 during the first three days of store sales, topping the four million units sold with last year’s iPhone 4S release, the WSJ reports. Despite the record, sales fell short of the eight million units some analysts predicted.

Google stock soars, as Facebook’s face-plants. Facebook stock dropped 9% to $21.96 Monday, the largest decline in more than a month, after a Barron’s article said the social network is failing to capitalize on the growing number of mobile device users, report Bloomberg’s James Callan and Mina Kawai. Meanwhile Facebook rival Google saw shares hit an all-time high at $747.84, beating its previous best of $447.24 set way back in November 2007, writes Alexei Oreskovic for Reuters, as the Web giant’s reliable advertising business comes back into vogue among investors disenchanted with younger social media companies.

Woz to become an Aussie. Apple co-founder Steve Wozniak has listed the rollout of a national broadband network as one of the reasons he wants to become an Australian, the Australian Financial Review reports. In Australia for the launch of the Apple iPhone 5 last week, Wozniak told Brisbane’s 4BC breakfast radio that he was “underway to become an Australian citizen.” Despite his status as a technology icon, Wozniak said he was not connected to a broadband service in his home in California. “There’s only one set of wires to be on and I’m not going to pull strings to get them to do something special for me,” he said. “I’ve sat with our FCC [Federal Communications Commission] commissioner and told him that story in his office, but it’s not going to happen. We just don’t have the political idea to bring broadband to all the people who are 1 kilometre too far away.”

Is Maui next? Oracle CEO’s compensation jumps.AllThingsD’s Arik Hesseldahl dips into Oracle’s proxy statement filed Friday and finds that stock and bonus compensation for Larry Ellison, Oracle CEO and new owner of the island of Lanai, jumped by 24% year on year to $96 million. Ellison controls almost a quarter of outstanding equity in Oracle, or more than 1.1 billion shares.

EVERYTHING ELSE YOU NEED TO KNOW

Green shoots in holiday hiring.Toys R Us is hiring 45,000 seasonal workers to staff up its pop up stores and help fulfill shipping this holiday , the AP reports. That’s a nearly 13% jump from its seasonal hiring spree last year. It follows Wal-Mart’s plans to hire more than 50,000 people this holiday season — up slightly from last year. And Kohl’s said last week it will hire more than 52,700 people, up over 10% from last year.

GE plans huge expansion of mining business General Electric boss Jeff Immelt swore off significant acquisitions in 2012. But GE executive Lorenzo Simonelli told the WSJ’s Kate Linebaugh that the company wants to more than double the size of its new mining business to $5 billion in revenue by 2016. He said “measured acquisitions” would be a part of that, but not to expect anything huge or “all at once.” Expansion into the mining sector would be part of a larger bet by GE on energy and resource-rich countries, which the conglomerate expects to spend heavily on its drilling and mining equipment, as well as on the medical machines and power generators it sells.

Corporate-bond binge gains momentum. U.S. corporate-bond issuance has blown past the $100 billion mark for September, only the third time it’s crossed that monthly threshold since at least 1995, Dow Jones Newswires reports. Upbeat market conditions and an absence of new firestorms in Europe opened the floodgates for corporate borrowers on Monday. More than $11 billion of new bonds were sold, on top of $93.9 billion issued from the start of the month through Friday. Leading the charge were UPS with a $1.75 billion deal, and billion-dollar offerings from foreign banks.

Caterpillar slashes outlook.Caterpillar cut its 2015 earnings forecast, becoming the latest corporate heavyweight to sound alarms on the sluggish global economy, Reuters reports. The company stopped short of forecasting a global recession, but warned of a bigger-than-expected fall-off in demand because of weaker commodity prices.

Factory riot exposes squeeze on China’s manufacturers. A riot at a factory run by Hon Hai’s Foxconn Group put a spotlight on growing tension in China’s factories. Companies are having trouble meeting worker demands for better compensation and work conditions even as economic growth slows, the WSJ’s Paul Mozur and Ian Sherr write. Average wages in China’s manufacturing sector rose 18.9% last year. But a Hon Hai spokesman said labor expenses aren’t a major cost for Foxconn and that the more important question was whether China’s younger workers will continue to have the desire to work difficult manufacturing jobs.

German banks fret over euro zone. As Europe struggles to restore confidence in Spain’s finances and the euro, Germany has another reason for urgency in resolving the crisis—the health of its own banks, write the WSJ’s Laura Stevens and Eyk Henning. German banks have largely hedged or disposed of their holdings of Spanish government debt, but they’re still heavily invested in Spanish financial institutions, commercial real estate and in other businesses hit by the crisis.

Lagarde calls for action on debt crisis, fiscal cliff. IMF chief Christine Lagarde told European policy makers to get their act together and implement their plans to save the euro — including the formation of a banking union, Bloomberg reports. In the euro region, “markets have been buoyed. … Now they want to see coordinated implementation — multiple players playing one game,” Lagarde said in prepared remarks for a speech in Washington today.

Lagarde also has some warnings about the U.S. fiscal cliff. “We all recognize that political calendars impact the timing of key decisions. But the current uncertainty presents a serious threat for the United States and, as the world’s largest economy, for the global economy.”

Bair book hammers Geithner. Sheila Bair’s new book is out today and the former head of the FDIC has some harsh words for some of her former colleagues. Bair paints Treasury Secretary Tim Geithner as an apologist for Wall Street, opposing some postcrisis reforms, DealBook says. She questioned whether his effort to inject billions of dollars into nine big banks masked a rescue intended solely for Citigroup . Bair spent much of the book criticizing the “go-go” attitude that fueled the crisis. She writes that the deal-making skills of Kenneth Lewis, then Bank of America ’s chief, “were clearly wanting.”

The factors that render the electrical grid vulnerable to cyber attack are strikingly similar to the cyber risk issues faced by health care, financial services, and other industries. But one recent malware campaign targeting utilities shows just how exposed the grid remains to cyber threats.